Iberdrola profits drop as demand for energy falls

I'm the digital editor at City A.M., and cover breaking news. I also co-host and co-produce the Unregulated podcast.

Follow Caitlin

Caitlin Morrison

SPANISH firm Iberdrola, owner of Scottish Power, reported a drop in revenue in 2014, to €30bn (£22bn) from €31.1bn in 2013, following a year in which UK demand for both gas and electricity dropped.

The company blamed mild weather in the first half of 2014, as well as the effect of energy efficiency measures introduced in recent years, for the fact that electricity demand was reduced by 4.9 per cent and gas by 13 per cent. The UK power generation business’ market share also declined slightly last year, from 6.3 per cent to 6.1 per cent.

According to Iberdrola, its results in 2014 should be viewed “within a complex operational environment characterised by an improvement in the macroeconomic situation on an international level”. However, it added this improvement had not yet led to an increase in electricity and gas demand in the Eurozone.

But Iberdrola chairman Ignacio Galan said: “The current fall in oil prices, if prolonged, will boost econ­omies and can reduce the costs of building renewable projects by helping supply chain manufacturers.” This in turn would help to push overall energy costs down.

Lower oil prices, said Galan, should not deter policymakers from the drive to reduce carbon emissions globally, which would create investment opportunities for Iberdrola “for a long time to come”. He added that the company believed its large-scale future projects in the UK would be able to deliver power “at a significantly lower price than many people expect”.

Shares in Iberdrola were fairly flat yesterday, dropping by 0.34 per cent on the Madrid Stock Exchange.